Edun: We've Devised Strategies to Plug Leakages, Deduct Automatically from Revenue Agencies
● Says lower inflation, stable FX rate, low interest rates pathways to FDI ● Reforms in NSIP, direct cash transfers to vulnerable Nigerians ongoing
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, yesterday disclosed that the federal government has now totally revamped its revenue streams through a combined application of digitisation, relevant regulations and guidelines to plug leakages.
Edun, made the disclosure during a podcast hosted by Bruit Costaud in collaboration with Ballard Partners of the United States of America, monitored by THISDAY in Abuja.
Fielding questions from the anchor, Nnamdi Atupulazi, the minister revealed that the federal government no longer waits for reconciliation with revenue generating agencies and Government Owned Enterprises (GOEs) as was the practice in the past, but deducts automatically from source in a bid to plug leakages.
He said: "And if you know anything about Mr. President's antecedents, the first thing he did in Lagos was to get all of the revenue. What he did was that he used digitalisation, used the latest technology to plug leakages and to improve efficiency of monitoring and collection.
"And this is exactly the same thing that he has done at the federal level. Now, the revenue of the federal government has been totally revamped.
"There has been an application of technology to make sure that what is due to the federal government, particularly from its various revenueearning agencies and companies and enterprises is now not taken based on compliance or not taken at the end of the year.
"Each day now, a federal government enterprise earns revenue, government checks and immediately it takes it seamlessly, automatically and digitally. So there is no issue of there may be a discussion later as to let us reconcile and so forth.
"But what we did is we looked at the rules, the regulations, the guidelines, the Fiscal Responsibility Act and so forth. And then we looked at the percentage exactly due to government without waiting for whether there is a surplus or not, and so forth."
Edun's revelation appeared to be a refreshing departure from the general belief that revenue generating agencies were indulging in sharp practices and shortchanging the government by violating the provisions of the Fiscal Responsibility Act (FRA, 2007) as well as the subsequent amendment in the 2020 Finance Act concerning their Operating Surpluses.
The minister also noted that efforts were in place to totally rationalise, revolutionise and improve the efficiency of tax administration in Nigeria, not necessarily by increasing taxes, but increasing efficiency and eliminating wastage.
Edun, who underscored the necessity of the twin policies of removing petroleum subsidy and the unification of the exchange rate of the Naira, noted that, "there has been a programme to stabilise the economy, which is having positive effects."
The Coordinating Minister cited improvement in daily oil production from 1.25 million barrels per day (mbpd) before the Tinubu administration took over to the current of about 1.65mbpd.
He stated that before the current reforms by the Tinubu's administration, "there was no longer revenue coming from the all-important oil company, NNPCL."
"Rather, there was payment of the unsustainable petroleum subsidy that was costing $10 billion a year.
"That was costing two per cent of GDP. That threatened the very finances of the federal government, and linked to that was the foreign exchange subsidy where the arrangements for putting foreign exchange into the economy were lopsided and were inefficient and lacked transparency and created tremendous arbitage and rent-seeking.
"So, Mr. President removed those two subsidies and by taking those steps, he saved the Nigerian economy because you now have a recovery of government revenues and has also stopped the incentive, for instance, the flight of petroleum products across the borders.
"We have sluggish growth-less than population growth of 3 per cent in recent years which has shown up in increasing poverty, human development index and unemployment figures.
"But that was then. There has been a programme to stabilise the economy which is having positive effects," he said.
Applauding the growth of the All-Share Index (ASI) and the increasing appetite of portfolio investors in Nigerian securities, the minister said while the development was good, the government was desirous of putting in place enablers for foreign direct investment (FDI) in real sectors of the economy.
According to him, portfolio investments come in quicker and also exit quicker, stressing that the administration was concentrating and working assiduously to stabilise the economy and attract real investment by domestic and foreign investors.
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